Polygon: Building Ethereum’s Internet of Blockchains
Published February 8, 2022
By Shailesh Lakhani, Prateek Sharma and Shivam Kumar
Today, we’re thrilled to announce Sequoia Capital India’s partnership with Polygon ($MATIC), Ethereum’s leading Layer 2 scaling solution.
One of the biggest challenges that the Ethereum network faces is scalability. This issue was first evident during the viral CryptoKitties in 2017 – a sensation led to a six-fold increase in total network requests, resulting in transactions taking several hours to confirm. More recently, the Cambrian explosion of applications built on Ethereum, including decentralized finance (DeFi) protocols and NFT projects, has resulted in a clogged network and prohibitively high gas. Ethereum’s network only accommodates roughly 15 transactions per second (TPS), a far cry from the average 1,700 TPS that Visa processes or the average 6,000 tweets per second on Twitter. If Ethereum aims to be the dominant decentralized computing platform for the world, it needs to find a way to handle more activity in its ecosystem. Enter Layer 2 scaling solutions.
There are several different types of Layer 2 scaling solutions that are covered in this article. Rollups are viewed as the ultimate scaling solution because they enable fast and cheap transactions without sacrificing any of the security and decentralization properties of the underlying Layer 1 blockchain. Transactions on rollups are more affordable for two reasons: 1) only a fraction of each transaction needs to be stored on the layer one blockchain, and 2) none of the computation for a transaction needs to be performed on Layer 1. More broadly, rollups play a central role in shifting from “monolithic” to “modular” blockchain architectures.
Polygon is most well-known for its proof-of-stake side-chain which offers high transaction throughput and low fees while still relying on Ethereum for final settlement and security.
However, Polygon could be thought of as a suite of Ethereum scaling infrastructure – Polygon’s solutions allow developers to pick and choose the solutions they need. In the last 12 months, the network has emerged as the Layer 2 scaling solution of choice for thousands of developers who are building and scaling applications in DeFi, NFT, gaming and Web3.
We first met Sandeep Nailwal, Jaynti Kanani (JD), and Mihailo Bjelic, the founders of Polygon (FKA Matic), in Jan 2021 when we picked up fast-growing activity from Decentraland, a popular gaming metaverse built on the sidechain. It was remarkable to see how they had frugally built Polygon from India since 2017, by weathering the bear market with no VC funding. By optimizing for low gas fees and building a robust developer acquisition engine and grants program, Polygon has quickly become the most widely adopted ETH sidechain with 7000+ decentralized applications, including some marquee DeFi/ NFT projects like OpenSea, Aave, Uniswap, Curve and Sandbox. As we got to know Sandeep, JD, and the team over the last year, it became clear that this is an ambitious, focussed and aggressive team that values innovation, at its core.
This August, Polygon made a $1 billion bet on zero knowledge (ZK) technologies as the “best bet at solving big challenges we are facing and onboarding the first billion of users.” Shortly after, the company made a spate of announcements, including the acquisition of Hermez and Mir and the launch of Polygon Miden and Nightfall. These acquisitions enable Polygon to launch their own ZK based rollups in addition to the existing proof of stake sidechain.
With incomparable developer adoption and the most advanced technology, we believe Polygon has a shot to become the leading ETH Layer 2 scaling solution and platform of choice for developers.